The long wait is finally over. It all started way back in 1986, when the then finance minister VP Singh put forward a budget proposal for overhauling the excise taxation structure, and after three decades GST was finally rolled out at a midnight joint parliamentary session last week. While the Government celebrated the occasion in a grand manner, businesses across all sectors, in every nook and corner of the country, besides still struggling to manage the transition, are worried that the hastily implemented reform may open up a Pandora's Box of new uncertainties for them, and perhaps their greatest concern is the so-called 'anti-profiteering clause'.

The anti-profiteering clause provides that all gains -- direct (rate reduction) or indirect (input tax credits) -- will have to be passed on to the consumers by way of a commensurate reduction in prices. According to recently released anti-profiteering rules under GST, a five-member National Anti-Profiteering Authority, headed by a secretary-level officer, will be set up to determine the methodology of profiteering and ensure that such gains are passed on to the consumers. If a registered entity is found profiteering illegally, authorities can ask it to reduce prices, return the undue profit to consumers along with 18 percent interest, impose penalty on it, or cancel its registration.

In many countries such as Singapore and Australia, implementation of GST led to spike in inflation, at least in the short-term, and keeping this in mind our policymakers want the Anti-Profiteering Authority to keep a tab on price rises. While this argument sounds logical, what has emerged as a cause of concern for business enterprises is the uncertainty surrounding the clause. The authority is yet to be formed, the rules are yet to be formulated, and it is not at all clear what will be the procedure and criteria to determine profiteering, whether anti-profiteering will happen on a product basis or company basis, how input tax will be calculated, or how one will prove that the benefits are passed on to the consumers . These questions need to be answered.

Meanwhile, concerns abound also about the Composition scheme, under which registered traders, manufacturers and restaurants with an annual turnover of Rs.20 lakh to Rs.75 lakh (Rs.50 lakh for NE states) can pay tax at 1 percent, 2 percent and 5 percent respectively. While this scheme is expected to provide some relief, SMEs view that the benefits, which are applicable only to intra-state supplies, will be limited. Also, under the scheme no input tax credit is available and the benefits are not applicable to suppliers supplying goods through e-commerce. B2B sellers are also concerned that opting for the scheme may result in loss of business as buyers may not get any credit of tax paid in case of B2B transactions.

We would like to hear from you regarding your recent experience with GST.